LADIES and gentlemen, please put your hands together and welcome the arrival of competition in Scotland's non-domestic water industry.

It's overdue - long overdue - but as of 1 April 130,000 businesses from Gretna to Lerwick can finally choose between providers.

So if the bills are too high and the service is poor they can take their sewerage and clean water needs elsewhere.

Several eager entrants to the new market are chasing their business.

Aquavitae UK aims to win 7 per cent of the market within the year and pitches itself as the consumer's champion.

Michael Samorzewski, managing director, says: "The customer has deserved better for a long time and that's what we aim to deliver."

He promises simpler billing and more management information, allowing customers to take real control of their water usage.

One Aquavitae's signing is Four Seasons Health Care, which has 54 homes across Scotland. It has seen savings in administration with an electronic system replacing the 196 paper bills it used to get each year.

One potentially limiting factor in the new market is that the retailers have to purchase from a single wholesaler - Scottish Water.

However, there are some opportunities for retailers and end users to get discounts. Doing this means taking action that allows Scottish Water itself to make some pretty hefty savings.

This is another area where Samorzewski will be very active.

"We'll do all we can to push prices down with the wholesaler.

"If we can achieve a 10 per cent reduction we can pass on benefits to customers and keep some for ourselves."

Aquavitae and rival SATEC are both keen to compete on price, and believe they can offer most people a lower bill than their current supplier - Business Stream.

A key part of the marketisation process has been to shift all nondomestic consumers who didn't opt out in advance to this independently-managed enterprise.

They are then free to decide whether to stay or go.

Gareth Davies, managing director and CEO of SATEC, believes many will want to head his way.

"Customers should come to us as we'll offer them a discount.

"On top of that, we are the only company that offers a complete waste and water solution."

The second part of the proposition is intriguing as it can involve a move away from Scottish Water as the wholesaler and towards selfsupply or on-site treatment.

SATEC has a history of providing customers with equipment to supply clean water or deal with waste.

Davies offers a complete audit of usage and will sit down with clients to consider every possible option.

"For some customers there may be the possibility of drilling a borehole or taking water from the river and treating it for them to use.

"We can also look at things like rainwater harvesting." SATEC will go even further.

It is inviting potential customers to outsource whole systems and facilities - so leisure businesses can hand over every aspect of managing things like swimming pools.

A fourth would-be supplier is Osprey Water Services - part of the Anglian Water Group - which applied for a licence in February.

Donald Maclean, managing director of utility solutions company Business Cost Consultants, believes that companies may be able to save between two per cent and 20 per cent on bills as a result of the market opening up.

Maclean says his company's job is to ensure clients get better value for money, not just lower prices.

"In particular, we will be pushing water retailers to improve their billing services," he says.

He believes most companies will be cautious about switching suppliers.

"There will be a slow but growing switch to new retailers rather than a rush," he predicts.

However, some people doubt the suppliers' ability to deliver.

Graeme Young, senior associate with Dundas & Wilson's EU and competition group, says this is unsurprising given what has happened down south.

"If you look at England and Wales over the last three years, competition has not really taken off and most people would probably consider it a failure.

"It has not really delivered lower prices."

However, he is quick to point out that Scotland's approach is very different, and that in England and Wales the market was limited to 2300 companies.

"The prospects of competition working in Scotland could be much better because there is a different regulatory framework and a much larger number of customers."

Young also believes the Scottish market might offer good enough margins for retailers to be able to invest and innovate.

This is good news for Alan Sutherland, CEO of the Water Industry Commission for Scotland, the regulatory body which has driven the process and must now make it succeed. He believes the prospects for customers are good and that growing numbers of retailers will be jostling to get their cut.

"There is genuine scope for many businesses to reduce their bills.

"Right now they should be phoning retailers and finding out what's on offer."

The potential gains are likely to increase over the next year as meters continue to be fitted in all businesses eligible to take advantage of water competition.

"All companies can benefit from the start, but obviously metering is an advantage as it allows companies to be much more creative with what they offer," says Sutherland.

However, there is a risk that different - sometimes opaque - pricing structures could cause problems judging between retailers.

Sutherland, though, does not think this need be a major issue.

"I doubt you will get the complexity you do with electricity.

"Where you get choice, you get suppliers finding different ways to deliver what the customer wants.

"This necessarily introduces a level of complexity and is not in itself a bad thing."

But does this mean everything will be sufficiently straightforward for an SME boss, with a dozen pressing things on his mind, to make a rational choice?

While Sutherland's answer is a firm "yes" - only the market can truly decide.

Matthew Shelley is a freelance journalist specialising in business and Scottish affairs.

'If you look at England and Wales over the last three years, competition has not really taken off and most people would probably consider it a failure'

Graeme Young, Dundas & Wilson

At an advantage

Competition may have come to the water market but one retailer has a distinct advantage over its rivals. Business Stream - part of Scottish Water - starts out as the automatic supplier to every business that has not chosen to go elsewhere.

Having close to 100 per cent of the customer base and an anticipated turnover of £340 million could be an excuse to sit on your laurels.

But Mark Powles, Business Stream MD, takes a different approach. Since coming into post in March 2007 he has tried to create a competitive and success-hungry enterprise.

"We brought a lot of staff and expertise over from Scottish Water but have worked hard to create a customer-focused retail business with an entirely new culture."

Powles' background is suited to the task - he has worked in tough and highly regulated industries from food to ferries. At Business Stream he has created a broad base of experience, recruiting staff from the likes of Barclays and Capgemini.

"As the incumbent it would be easy to say people should stay with us because we are bigger and more beautiful than anybody else.

"I don't want to do that. I want them to stay because we are excellent at what we do."

Business Stream has made serious efforts to identify what customers want. They now have a series of touchstone principles which aim to provide services that are effortless, dependable and innovative. That means better billing methods, more use of internet technology, face-to-face relationships with major clients and an emphasis on helping customers save through increased efficiency.

Business Stream has been carefully positioned as the value-for-money rather than the lowest-possible-bill option.

Powles says: "It's about service, not just price. That's what makes value.

"We want customers to look at more than whether a supplier offers an initial discount.

"They need to think about whether a supplier really understands the industry, is interested in the customers' long term interests, and whether they are there for them 24 hours a day, seven days a week."